EU Formally Charges Microsoft with Antitrust Violation

As expected, regulators from the European Union (EU) formally charged Microsoft with violating the terms of its 2009 antitrust settlement. With the release of this so-called statement of objections, the European Commission (EC) can now fine Microsoft up to 10 percent of its annual revenues, or over $7 billion.

The charge stems from a requirement that Microsoft offer consumers in Europe a choice of web browsers in Windows, an agreement that Microsoft silently disabled for a period of 17 months between February 2011 and July 2012. The software giant admitted to disabling the browser ballot screen in Windows 7—an action it described as a “technical glitch.” It apologized for the mistake in July.

“Microsoft has failed to roll out the browser choice screen with its Windows 7 Service Pack 1, which was released in February 2011,” an EC statement reads. “From February 2011 until July 2012, millions of Windows users in the EU may not have seen the choice screen. Microsoft has acknowledged that the choice screen was not displayed during that period.”

Microsoft is now able to reply to the charges in writing and request a hearing to present its defense. But given that the firm has already admitted to violating the terms of its antitrust settlement for such a lengthy period of time and has in fact apologized publicly for the error, this defense would probably amount to little more than an attempt to reduce the fine. Microsoft has already been charged over $2 billion because of various antitrust-related issues with the EU.

Microsoft recently revealed that a browser choice interface, usually referred to as a “browser ballot,” would appear in Windows 8, too, and that various “N” editions of Windows 8, which unbundle media playback functionality, would be made available in Europe when this new system hits the market later this week. Both of these changes to Windows are the result of previous antitrust charges in the EU.

And Windows 8 could once again land Microsoft is trouble with antitrust regulators there. Browser makers such as Google and Mozilla have argued that Microsoft artificially prevents their products from offering the same functionality as does Microsoft’s browser on Windows 8 and Windows RT, the ARM-based version of Windows 8. The EU is currently investigating this charge as well.